Uber: why the world’s biggest ride-sharing company has no drivers

Uber’s carefully constructed public policy is designed to skirt regulations – so the person behind the wheel of your car is a ‘partner’ or even a ‘customer’

Uber drivers protest in London last week as the firm increased commission for new drivers from 20% to 25%, a move which will generate an additional £50m per year.
Photograph: Mark Kerrison/Demotix/Corbis

At the beginning of last summer, Uber had about 80,000 regular drivers in the US. By the end of the season, it had none. The ride-sharing company had decided to call them “driver-partners” instead.

Driver-partners, according to an upbeat paper written by Uber’s head of economic research in January, are workers who choose to provide car rides using the Uber platform. What they definitely aren’t, the company claims, are Uber employees.

“The report helps to detail how much these part-time contractors value their flexibility and ability to make a living, while not performing duties as an employee,” wrote Justin Klintz, head of North America public policy for Uber.

Uber operates in 351 cities in 64 countries, has over 1.1 million active driver-partners, and was valued this summer at around $50bn, making it the world’s most valuable private start-up. Despite its riches, the company exerts significant effort to control regulation of its operations, the drivers who power it, and even the language used to talk about ride-sharing.

Uber is fighting legal battles around the world, some with its own driver-partners, who are seeking the benefits of traditional workers. Driver-partners in California have filed a class-action lawsuit for petrol and maintenance expenses, while driver-partners in the UK want paid vacations and minimum wage protection.

“Although it uses this term ‘partners’, what Uber really says is that their drivers are self-employed contractors who can come and go as they please,” says Nigel Mackay, a lawyer at Leigh Day, which represents a group of disgruntled Uber drivers in the UK. Drivers are certainly free to choose where and when they work, and Uber says that more than half of them work less than ten hours a week.

However, Uber makes deductions from drivers’ pay, decides which routes they should take, and can penalise or even “de-activate” drivers who turn down too many fares. “There are many ways in which it acts not as a partner but as an employer,” says Mackay.

Uber’s language of partnership extends beyond drivers to politicians. When the Governor of Arizona, Doug Ducey, took office in January, he shut down a planned sting operation against Uber and Lyft, some of whose drivers lacked the necessary insurance or licenses. He then wrote a law allowing ridesharing companies to operate without meeting the same qualifications as traditional taxis.

Recently, Ducey promised to change rules to allow Uber to test self-driving taxis at state universities without human drivers on board, a move that the National Highway Traffic Safety Administration strongly recommends against. In return, Uber sited a customer service centre in the state and promised a $25,000 partnership with the University of Arizona.

Not all of Uber’s partners fare so well. In February last year, Uber announced a partnership with Carnegie Mellon University in Pittsburgh to work together on mapping and autonomous vehicles. By May, Uber had used that partnership to lure more than 40 of the university’s researchers and scientists to work for its new Advanced Technologies Center instead.

Ultimately, Uber plans that self-driving taxis will remove the need for driver-partners altogether. “The reason Uber could be expensive is because you’re not just paying for the car – you’re paying for the other dude in the car,” said Uber CEO Travis Kalanick at a technology conference last year. “When there’s no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle.”

To prepare its drivers for that moment, which could be as little as a decade away, Uber has been experimenting with other euphemisms. It recently issued new terms to drivers in the UK referring to them as “customers”. The idea, according to Uber, is that drivers are paying Uber for the use of the app to grow their business. However, they are also getting paid, a larger amount, by Uber to actually complete the rides, and can be excluded from paying Uber if they don’t accept enough fares.

Mackay warns against trying to unpick the complexities of the language. “Like ‘partner’, ‘customer’ here doesn’t actually have any legal meaning,” he says. “What Uber is trying to do is get even further away from the idea that its drivers are workers or employees.” The months ahead will show how successful Uber’s efforts have been. The California class-action lawsuit is scheduled for June 2016, and the Employment Tribunal in the UK will probably rule early in the new year.